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DENVER, CO - The House today advanced legislation on a preliminary vote to put more money back into the pockets of hardworking Coloradans by expanding the state Earned Income Tax Credit and Child Tax Credit.
“This legislation will increase the Earned Income and Child Tax Credits and put $150 million back into the pockets of hardworking people,” said Rep. Shannon Bird, D-Westminster. “Coloradans deserve a tax code that boosts their incomes and helps them build a better future for themselves and their families, and that’s exactly what this legislation does. These tax credits are essential and have lifted Coloradans across the state out of poverty. This bill continues our work to save people money and ensure our tax code works for all Coloradans.”
HB23-1112 would expand the state Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) and return nearly $150 million more to hardworking families. For tax year 2024, the Colorado EITC would increase from 25 percent to 40 percent of the federal EITC, a four fold increase from where it stood in 2020. A refundable tax credit available to certain families with children under the age of 6, the Colorado CTC would increase by 10 percent starting in tax year 2024, with the tax credit ranging from 20 to 70 percent of the federal CTC depending on marital status, number of qualifying children, and federal adjusted gross income.
The federal Child Tax Credit has lifted over 57,000 Colorado kids out of poverty and helped over 630,000 families across the state, while the federal Earned Income Tax Credit has helped cut the national poverty rate in half.
The bill builds on legislation passed by Colorado Democrats in recent years to make Colorado more affordable for working-class families. The General Assembly passed HB20-1420 and HB21-1311, which at the time doubled the state's Earned Income Tax Credit and funded the Child Tax Credit, saving hundreds of thousands of Colorado families money. This session, Colorado Democrats passed HB23-1006 to require employers to provide information about federal and state earned income tax credits and child tax credits to their employees, spreading awareness to Colorado families that qualify for these tax credits to save them thousands of dollars.